Anthropic, a San Francisco artificial intelligence start-up, is close to raising roughly $300 million in new funding, two people with knowledge of the situation said, in the latest sign of feverish excitement for a new class of A.I. start-ups.
The deal could value Anthropic at roughly $5 billion, though the terms were still being worked out and the valuation could change, one of the people said. The start-up, which was founded in 2021, previously raised $704 million, valuing it at $4 billion, according to PitchBook, which tracks private investment data.
Silicon Valley has been gripped by a frenzy over start-ups working on “generative” A.I., technologies that can generate text, images and other media in response to short prompts. This week, Microsoft invested $10 billion in OpenAI, the San Francisco start-up that kicked off the furor in November with a chatbot, ChatGPT. ChatGPT has wowed more than a million people with its knack for answering questions in clear, concise prose.
Even as funding for other start-ups has dried up, investors have chased deals in similar A.I. companies, signaling that the otherwise gloomy market for tech investing has at least one bright spot.
Other funding deals in the works include Character.AI, which lets people talk to chatbots that impersonate celebrities. The start-up has held discussions about a large round of funding, according to three people with knowledge of the situation.
Replika, another chatbot company, and You.com, which is rolling out similar technology into a new kind of search engine, said they, too, had received unsolicited interest from investors.
All specialize in generative A.I. The result of more than a decade of research inside companies like OpenAI, these technologies are poised to remake everything from online search engines like Google Search and Microsoft Bing to photo and graphics editors like Photoshop.
The explosion of interest in generative A.I. has investors and start-ups racing to choose their teams. Start-ups want to take money from the most powerful investors with the deepest pockets, and investors are trying to pick winners from a growing list of ambitious companies.
The stakes are high. Venture capital investors typically do not back multiple companies in one category for competitive reasons. So a bad bet now could lead to a missed opportunity to make money on other deals down the line.
Despite the excitement, few of these start-ups have a clear plan to make money. That has rarely been a problem in Silicon Valley; past generations of investors poured money into social media sites or mobile apps on the assumption that they would figure out how to turn a profit later.
But that strategy has been less of a sure bet in recent years as start-ups have expanded beyond the tech industry’s bread and butter of selling software or selling ads. Certain businesses, like on-demand delivery, ride-hailing apps and subscription meal kits, took longer to make money than investors hoped or did not make money at all.
Anthropic was founded by a group of people that included several researchers who left OpenAI. Its funding talks stand out because of its earlier backers. The vast majority of its funding came from the disgraced cryptocurrency entrepreneur Sam Bankman-Fried and his colleagues at FTX, the cryptocurrency platform that went bankrupt amid fraud charges last year. That money could be clawed back by a bankruptcy court, leaving Anthropic in limbo.